MFA and AIMA jointly submitted a comment letter to the Commodity Futures Trading Commission (CFTC) on its “Further Proposed Guidance Regarding Compliance With Certain Swap Regulations.” In the letter, MFA and AIMA expressed appreciation for the CFTC’s proposed modifications to the “U.S. person” definition, but also expressed continued concern with the breadth of the definition and its application to non-U.S. funds. In particular, MFA and AIMA urged the CFTC to provide equal treatment of funds and corporate entities by modifying the proposed “U.S. person” definition to:

Eliminate the “look-through” to all indirect investors, and

Apply only the tests in alternative prong (ii) to funds, specifically, the tests related to place of organization, majority direct ownership, and unlimited liability.

MFA and AIMA also asked the CFTC to clarify that:

A fund’s principal place of business is its place of organization or incorporation,

A fund may rely on representations from its investors at to the investors’ U.S. person status, and

If it modifies the “U.S. person” definition in the future, it will give notice, an opportunity for the public to comment and one year for affected entities to comply with the relevant regulatory requirements.

Lastly, MFA and AIMA urged further coordination between the CFTC and other U.S. and international regulators to avoid duplicative regulation and to address issues related to the practical details of how substituted compliance will work in practice.